Live Blog: Yelp, NexTag & Others At The US Senate Hearing

OK, it’s round two. And I can tell you no, don’t expect much. How do you clear the press table when Google competitors are about to testify at a Senate hearing? Have Eric Schmidt do a post-game recap in the hearing room hallway. He’s done, I’m back, will catch up as best I can.

NOTE: Our follow-up article, which covers the entire hearing with highlights and without live blogging typos is now available: Google Hearings: The Post-Game Show. You can also continue on with the live blogging, below.

Competitive landscape is constantly evolving. Core of Google’s success is best results are those that give what users want. If government tries to declare Google a utility, hard to then figure how who is supposed to rank over whom, what is fair. If this is all sounding pro-Google, well, her firm represents Google.

Barnett: Was asked, represents FairSearch.org folks, says yes. And takes word of Schmidt, huge barrier of entry, Google got there first (um, actualy, they so did not. They were like second. Third, even).

Kohl: didn’t catch…

Barnett: No doubt monopoly power can be harmful, so that puts special responsibily on company. Was offended by something Schmidt say about scraping. Said we thougt was good, got letter, took it down. Not what happened. TripAdvisor, his client, had similar situation. CEO of TripAdvisor said don’t want to appear, take our content out, GOogle said no, only if you want out of Google overall. That was a coercive tactic designed to take the contentad use against them (and yes, Google shuld allow selective which of its search engines you want to be in). After FTC investigation, within weeks if not days, Google backed down.

Kohl: Creighton, you think a monopoly?

Creighton: No. If it were to raise price or do something to keep consumers to switch, could it get away with that. That’s a monopoly power. Is there this ability to forclose competition. Each of you right now can test whether or not if you like GOogle results. If not, free and instantanous to try someone else’s. If you entered Yelp, and didn’t find Yelp, I doubt you’d get back (but this is about Yelp doing well for generic terms, of course, but some of the senators might not get that).

Lee: to Barnett, says he find one of his arguments compelling about reigning in google. What do you see as a threat if Google doens’t resolve these anti-trust issues, might cause parts of internet subject to intusion by government (you mean like the government demanding if your results are fair or not?).

Barnett: Introduce anti-trust rules, then let the market do the specifics. Works other way, too. If Google continues to expand and continues to get products and services didn’t catch…

Lee: You see that threat growing. His concern as a free market conservative Republican (gotta get that in), no place for intrusive government regulation on the internet. What can google do on a volunatary basis?

Barnett: First thing is to live up to Schmidt’s words and get they are dominant (I thought Schmidt agreed). Make sure non-algo results are clearly labelled (like the FTC already requires?), make sure competitors aren’t harmed.

Lee: Principle concern with Google’s practices is that they might not take actions to stop harm to the consumer. How might those cause harm?

Barnett: They’re an ad company, and a good portion already from monopoly. To the degree maintain, the more ultimately costs consumers, as advertisers have to pay. We also lose the competition and innovation as they dominant, and that’s why preserving this is so critical.

Franken to Yelp and NexTag: If you were starting now, would you?

Yelp: I’d find something else to do. Wehn started, it was a level playing field, did a search and didn’t think he got good local search results, that’s why we started the busines, started getting traffic. Now with GOogle taking up so much of the real estate, there’s no way I’d start fresh.

NexTag: I don’t think we could do it. Our business requires merchants to participate in NexTag. Couldn’t do it with the Google today where the top half of hte page dominate by Google dominanted interestes, right side is dominated by unique ad types that shopping sites can’t buy.

Franken: Was Schmidt correct on relations with Yelp?

Yelp: No, in 2005, Google asked to use, quickly realized wasn’t sending traffic and making competitor. Dropped out 2007-2009, Google tried to do there. Wow, so they did drop out. Think that’s been glossed over. Then content found way back in without permission in 2010, “it was jsut there” and we immediately registered our complaint, lots of “we understand our concerns” until interest on the government side.

Franken: this is scraping, the definition of scaping.

Yelp: They took our info and used it in a totally different property.

Franken: Schmidt said Places wasn’t app, now he’s corrected himself, Creighton you said monopoly is over 80%. Mobile is 97$

Creighton: Taht nubmer completely excludes apps, how most people find info on their phones today.

Franken: Did Gogole spend money to be the default search engine on Apple.

Creighton: Googel, Bing and Yahoo all competed to be on the iPhone, Google prevailed.

Franken: Can you answer my questio. Did Google pay Apple to be the default search engine

Creighton: Google certaily enter into a deal.

Franken: Ddi they pay money

C: I don’t know

F: Surprise you?

C: Wouldn’t (think she said) going on you could easily change. But we want them all to compete and no reason to think Apple didn;t pick because good. Apple’s not going to take the worse search engine.

C: Wouldn’t (think she said) going on you could easily change. But we want them all to compete and no reason to think Apple didn;t pick because good. Apple’s not going to take the worse search engine.

C: Purpose is to enable you as a consumer to tell if that’s the site you want. Gogole has not ever unlawfully taken.

B: Let’s leave out the unlawfu part. Question if you deny Yelp’s testimony

C: Google’s experience is peopel want to have listings, that;s what drives traffic. Yelp is talkig about some micro managment of that

B: And Google’s not dominant under Sherman anti-trust act?

C: Wouldn’t think so.

B: Because not over 80%

C: Because market isn’t just limited to general search engines

B: What if a court decided it was a monopoly. What would you do? Or if they’d done anti-competitive stuff, putting sites lower, etc.

C: too hypothetical to answer.

B: To avoid a continuing potential series of govt interventions that none of us would favor as a first choice, what would you suggest.

C: Didn’t catch the response, sounded mostly a dodging non-response. Another question, catching up to response…

If you talk to local advertisers, what they tell you today is the number one place you have to be is Facebook.

Kohl: Is Google correct that consumers cna go right to NexTag, so why’s it matter?

N: When people shop, they type in washing machine. From there, the rest takes place, the first half the Google page begins to layout and preference advertisers and products that have a preferentail relationship with Google. If they didn’t have that, we’d bless the Lord above, and they’d go to NexTag (really?).

Kohl: What if you weren’t there at all.

N: We’ve perfected the Google platform, which is great beasue they’re want of the biggest companies no one has heard of (wow, that’s your defense).

K: Ask same to Y.

Y: 75% of all its traffic from Google, 50% of that are peopel who start search on Gogoel and find way to Yelp, other 25% are those who add that they specifically want Yelp iin some way. “If we were not in Google, it would be devestating.” (wow, again defense is you have a Google dependency problem?)

Missed question to Creighton. Now Lee is up. Loves the free market, he stresses. He’s focused on consumer welfare. Question to NexTag & Yelp, what does Gogoel do that most harms consumes and how stop that?

Y: The key would be separatig out distribution from its own properties. Chart definitively showed GOogle gives preference to itself for a wide variety of queries and often doesn’t have the best content (true enough for some places pages). That’s a big problem.

N: I’d say the guiding principle is the level playing field. In their interest I’d say, if going to create a link anywhere on their page, shoudl be NexTag;s ability to get access to that ad unit (there are some image-enhanced ads NexTag can’t buy). Next some units aren’t labelled (he mean oneboxes) that not everyone can be in.

C: Defer to company, but thinks that’s another word for regulation. Barnett’s testimony shows a big Gogole Places result top of results. I encourage you to run that on Yahoo, it looks the same. Different on Blekko and Bing. 58% of users want an answer.

Franken: I was thinking something voluntary (Al, they need an ombusman!)

C: They have an incentive to return what consumers want, not their own content. And misunderstanding what you get on those places pages. Itself is a set of search results, 2/3rd of the time, people click outbound. another 1/3 to go search sits. only 7% I think she said, maybe less, do they click on ads. Google’s actually losing money.

C: Google already changes its algo 500 times per year, it would be too slow to keep up (hey, not in general).

Blumenthal: Points out to Barnett that Schmidt did say have special monopoly responsibilities. And hey, would you bring a case against Google now?

Barnett: There was a case we looked at that had to do with Google wanting to do transation with Yahooo, Google bailed in face of DOJ that might file a suit. Tehre’s a least one instance where I thin they crossed the line. Earlier this year, they acquired ITA. That’s another issue, but I think the department was right to challenge it. In this context, I’d certainly say I’d open an investigation.

Many things talked have nothing to do with the search algo, but there are lots of questions about what google does do with the search algo. To his knowledge, no one outside has ever looked at it (I literally laughed out loud at how you’d spread that out on the floor).